What is a healthy burn rate?
Burn rate is how fast your business spends cash. On its own it's just a number — what makes it healthy or dangerous is how it compares to the cash you have and the growth you're buying with it.
Skip the math — the free startup runway calculator runs this from your own figures.
Open the free calculator →Gross burn vs net burn
Gross burn is your total cash going out each month — payroll, rent, software, everything. Net burn is that number minus the cash coming in from revenue. Net burn is the one that actually drains your bank account.
A business spending $50,000 a month but bringing in $30,000 has a net burn of $20,000 — that's the figure that sets your runway.
How to calculate it
The simplest way: take your cash balance at the start of a period and subtract the balance at the end, then divide by the number of months. That average monthly decline is your net burn.
Averaging over three months smooths out one-off costs and gives you a truer picture than any single month.
What counts as healthy
There's no universal number — a healthy burn is one that buys real progress and still leaves you comfortable runway. The common rule of thumb is to keep at least 6 months of runway at all times, and many aim for 12–18 months after raising money.
Burning fast isn't automatically bad if it's producing growth that will raise more money or reach profitability. Burning fast with flat results is the real warning sign.
Burn, runway, and the decision
Runway is simply your cash divided by your net burn — the number of months before you hit zero. The moment to act is well before that, because raising money or cutting costs both take time.
The free runway calculator below turns your cash, burn, and revenue into a runway figure instantly, so you always know where the line is.
Questions
Is a negative burn rate good?
Yes — a negative net burn means you're cash-flow positive, taking in more than you spend. At that point runway is effectively unlimited and the conversation shifts from survival to growth.
How do I lower burn without killing growth?
Start with costs that don't drive growth — unused tools, over-provisioned infrastructure, nice-to-have spending — before touching the things that actually bring in revenue. Protect the engine, trim the rest.